■ Takeo Fukui, a veteran Honda engineer, has taken a
well-established route to the top spot at Honda Motor Company, a company
that started out as a small motorcycle company in Hamamtsu, Japan, in 1959
but steadily grew into a leading manufacturer of such products as
all-terrain vehicles, automobiles, generators, lawn mowers, marine
engines, motorcycles, personal watercraft, and power equipment. The
traditional path taken by Fukui is one that has long been dictated by
company policy, which emphasizes Honda's engineering-oriented
corporate culture. He was drawn initially to Honda because, at that time,
it was the only Japanese car manufacturer involved with Formula One racing
and the research and development necessary to develop such vehicles.

Takeo Fukui.
Photograph by

Itsuo Inouye. AP/Wide World Photos

.

Fukui's career as of 2004 had spanned more than three decades with
Honda. During this time, his widespread duties focused primarily on
engineering, racing, and research and development. During the course of
his outstanding career he worked with the team that developed the landmark
CVCC (compound vortex-controlled combustion) engine. The clean er-burning
engine vaulted the Honda Civic in 1975 to the ranks of the first car to
meet the strict U.S. Clean Air Act standard without the use of a catalytic
converter. Another success for Fukui was in leading Honda's
motorcycle racing team to a string of championships in the 1980s. A third
accomplishment under his direction was the Japanese launch in 2001 of
Honda's successful Fit subcompact car.

ENGINEERING WITH HONDA

Fukui started his career in April 1969 as an engineer—working with
Hiroyuki Yoshino, then CEO, and Nobuhiko Kawamoto, an engineer who later
assumed the Honda presidency—on the Honda project team that
developed the CVCC engine. He was assigned to the engineering team that
eventually met for the first time the challenging exhaust emissions
standards of the U.S. Clean Air Act.

According to Todd Zaun, writing in the
Wall Street Journal
(July 10, 2003), Fukui had a strong competitive nature even in his early
days with Honda. A superior reported that during early government tests
for a new Honda Civic, Fukui applied excessive lubrication to the test
car's engine so that it would operate at peak performance. The
application succeeded in raising the car's fuel-economy rating;
however, a government official quickly realized what had happened and
forced Honda to retest the car. Although Fukui does not deny the tale, he
admits, "The truth is, as part of my nature, I don't like to
lose."

By the first quarter of 1979 Fukui had been appointed the chief engineer
at Honda R&D Company, and three years later he was selected to be
chief engineer at the Honda Racing Corporation. After losing a string of
races during the late 1970s, Fukui abandoned research on a sophisticated
four-stroke engine technology and returned to the older, but tested,
two-stroke design. Soon, Fukui was leading his racing team to nearly a
decade-long series of victories, including Honda's first world
championship within the World Grand Prix 500cc class. At that time,
according to the
Wall Street Journal
, Fukui said, "Ultimately, the result is everything."

By December 1983 Fukui had attained his first management position, that of
director for the Honda Racing Corporation. Then, in September 1985, he was
promoted to executive vice president of the Honda Racing Corporation and,
in May 1987, was promoted to president, along with additional duties as
managing director of the Honda R&D Company. At this time, Fukui
felt that he clearly understood automobile racing and the technology it
took to develop such a program, having benefited from thoroughly
discussing racing technology (and "racing spirit") with the
race-car innovator and Honda founder Soichiro Honda. A year later, in
1988, Fukui was again promoted, this time to director of the Honda Motor
Company. By this time, Fukui had assumed overall responsibility for
motorcycle development, which he supervised from 1987 to 1992.

The early 1990s saw Fukui assume the positions of senior managing director
at the Honda R&D Company; general manager at Motorcycle
Development, Honda Motor Company; and general manager at the Hamamatsu
Factory, Motorcycle Operations, Honda Motor Company. The Hamamatsu Factory
possessed one of Honda's more multifaceted manufacturing
facilities, producing a complex mix of products that included auto
transmissions, motorcycles, and power products. By mid-1994 Fukui had
become executive vice president and director of Honda of America
Manufacturing (HAM) in Ohio. Two years later, in 1996, he became HAM
president and also the managing director of Honda Motor Company. Fukui
assumed this leadership role at a time of innovation for the North
American automobile/motorcycle complex. With increasing U.S. demand for
Honda products, Fukui guided HAM to a significantly expanded operation in
production, design, number of models, and suppliers.

Before assuming the positions of president and chief executive officer of
Honda Motor Company, Fukui was president of Honda R&D Company
(starting in 1998); a year later (1999) he was promoted to senior managing
and representative director (in charge of motor-sport activities,
including Formula One Grand Prix racing) of the Honda Motor Company. At
the end of June 2003 Fukui attained the highest positions at Honda,
president and chief executive officer. He brought to these roles his
expertise in research and development, engineering, construction,
environmental technology (including pollution-control technologies),
racing activities, and the manufacturing of automobiles, motorcycles, and
power products.

CRITICAL U.S. EXPERIENCE

Michael Flynn, director of the University of Michigan's Office for
the Study of Automotive Transportation, emphasized the need for
Honda's top executives to have extensive experience in the United
States, its largest market. In addition, Mary-Beth Kellenberger, an
industry analyst with Frost & Sullivan, stated that executive
selections at Honda (such as Fukui's) demonstrate the
company's emphasis on engineering and R&D knowledge, with a
special stress on manufacturing and sales.

Like all previous Honda presidents selected to lead world wide operations,
Fukui had the necessary experience in the U.S. market and with
manufacturing, engineering, and research and development. Specifically,
beginning in 1994, Fukui was vice president and later, in 1996, president
of Honda of America Manufacturing. He directed the Ohio manufacturing
plants at Marysville, East Liberty, and Anna, where Honda, as of the early
2000s, had about 13,000 employees who were making such automobiles as the
Accord, Civic, and Element. Beginning in 1998 Fukui ran the huge
manufacturing and engineering operation of the Honda R&D Company in
Ohio, Honda's research and development branch.

GOALS FOR MEETING CHALLENGES IN THE EARLY 2000S

Fukui assumed the helm at Honda during an increasingly challenging time.
Several crucial areas were showing signs of weakness for Honda, weaknesses
of which Fukui was well aware when he shaped his goals for directing the
company. The all-important U.S. market was continuing to post solid sales,
but its rate of growth had slowed, in part because of the 2002 Iraqi war
and the sluggish economy during the first three years of the 2000s. In
Japan, Fukui recognized that Honda faced increasing competition from the
Toyota Motor Corporation and a rapidly growing Nissan Motor Company. To
meet these challenges, Fukui formulated several goals.

His first goal was to initiate a new plan of development, which would take
effect with the 2005–2006 fiscal year. At that time, Fukui intended
to direct the company toward medium-term growth within its worldwide
business arenas and to concentrate on improving the quality and
technological advancement of Honda products and the degree of motivation
of its employees. He was especially interested in fuel-cell technology in
future transportation. Moreover, Fukui intended to focus on strong vehicle
performance. One way to ensure high standards of vehicle performance, he
believed, was to maximize the company's exposure to Formula One
racing. Fukui also planned to concentrate on heightening what the
automobile industry termed the "fun-to-drive quotient" of
Honda vehicles. As he saw it, the fun-to-drive factor derives from
Honda's concept of a comprehensive package of ride, styling,
equipment, and performance.

Another goal was to continue strengthening the global network put in place
by Yoshino during his five-year tenure as president of Honda R&D.
By expanding and integrating Honda's global operations, which
stretched from the United States to England to Indonesia, Fukui hoped to
push the network into the rapidly expanding Chinese market and other
developing Asian markets. Fukui planned to more than double production in
China during 2004, as the company expected demand by Chinese consumers to
grow rapidly. However, because Honda is Japan's second-largest
car-manufacturing company, Fukui was critically aware that he needed to
focus on revitalizing Honda's Japanese operations, which, as noted,
had seen increasing competition from Nissan and Toyota. Finally, Fukui
intended to aggressively pursue Honda's continued expansion in the
U.S. market.

In pursuing these goals, Fukui conceived of Honda as more than an
automobile maker. Instead, he thought of Honda as a
"mobility" company, involved in many modes of
transportation, including new areas such as airplanes. In fact, Fukui
planned to build a "Honda Civic of the Sky," a twin-engine,
four- to five-passenger jet with improved aerodynamics, an engine that
would deliver a 20 percent increase in fuel efficiency over traditional
small jets, and new lightweight composite materials for the fuselage.

PRIORITIES

Fukui did not focus on volume target or market share; instead, customer
satisfaction was his first priority, as well as consistently improving
product image. His philosophy stemmed from this priority: satisfying
customers and improving products expand sales and, in turn, produce plant
expansion. Unlike most automakers, who build their plants first and then
calculate market share based on production capacity, Fukui pointed out
that he intended do the opposite so as not to diminish quality and
performance.

According to GrandPrix.com, Fukui stated his intent to focus the company
on "establishing the technology that will drive the 21st century
auto market" ("Honda's New Boss Is a Racer").
In Fukui's view, Honda must continue to meet the challenge of a
global community by both respecting and understanding other
countries' cultures when introducing Honda products into those
societies. As of 2004 Honda was progressing in many and varied directions,
led by Takeo Fukui, a fiercely competitive and experienced engineer.

See also
entries on Honda Motor Company Limited, Nissan Motor Co., and Toyota
Motor Corporation in
International Directory of Company Histories
.